AT&T’s heavily promoted Mobile Share Value plan has been a huge success for AT&T Wireless. The program stopped the bleeding of customers migrating to aggressive campaigns from the “un-carrier” T-Mobile, while at the same time targeted higher priced Verizon plans.
In response to AT&T’s aggressive pricing, Verizon, Sprint and T-Mobile rapidly responded. Verizon has aggressively re-priced family plans, while the “un-carrier” T-Mobile continues to shake the ground of AT&T and Verizon by pushing data caps towards the realm of unlimited.
The AT&T Mobile Share Family Plan initially comes in as a strong cost savings for many subscribers, but come this Fall when the new iPhone arrives, the fine print may become a deal breaker for many customers. Millions of AT&T Wireless customers who have switched to the plan with their existing iPhones are not likely to upgrade. In fact, many iPhone 4S and 5 customers may choose to go well beyond their traditional two-year iPhone upgrade path, or switch carriers if they can.
The hook that is getting customers onboard? Initial pricing. It is saving many families with four or more lines at least $100 per month, but it may prove only temporary for many. Consumers are still thinking of their plans in two-year upgrade cycles, but the Mobile Share Value plan does away with two-year upgrade cycles and puts customers into their Next program. It quickly becomes complicated (something carriers seem to love), but if a family of four is paying $160 for iPhones of any age, once they go to upgrade to the new iPhone this fall, the $160 will quickly balloon roughly $25 per line for every iPhone upgraded, regardless of its age. Even if a customer is upgrading a four year old iPhone 4, which is no long being subsidized, AT&T will raise the $160 a month plan roughly $25 a month.
AT&T has cleverly moved out of the subsidy game whether its customers realize it or not. The new iPhone Air is likely to arrive in September, and when it does millions of AT&T customers are going to be very upset that adding new iPhones to their Mobile Share Value plan is going to cost them a lot more.
If typically aggressive T-Mobile chooses to take advantage of AT&T’s pricing schemes, it may find a treasure trove of unhappy AT&T customers willing to port large numbers of family plans to their newly minted nationwide LTE network. If AT&T has their way, it will not be easy for other carriers to buy customers out of the Mobile Share Value plan. There is likely to be a wake of upset AT&T customers, forced to hold onto their existing and aging iPhones. But AT&T Wireless will be fine with iPhone customers unable to upgrade, as the company will simply continue to watch millions of iPhone 5 and 5s subsidies run out, pocketing the difference until its customers are finally willing to pay more – or fine a way to leave.
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